I’ve described the SEC as an “unwitting accessory” to Madoff’s fraud. Now there’s a suggestion that another cog in the government’s anti-fraud machinery might also have been involved.
Walter Olson reports on correspondence from securities lawyer and Milberg Weiss critic Howard Sirota that Madoff’s investor list includes not only Mel Weiss as previously reported, but also his wife, son Stephen A. Weiss, partners David Bershad and Pat Hynes, plaintiff Howard Vogel, accountants Buchbinder Tunick, and class action firms Wolf Popper and Wolf Haldenstein.
Olson adds:
Sirota believes that other persons and entities on the Madoff victims list have also served as lead plaintiffs in securities litigation or as plaintiffs in other litigation handled by class-action firms. All of which could be mere coincidence, or could suggest that either Madoff himself or others in his circle might have played some role in funneling lead plaintiffs to the class-action bar. (Particularly in the “race to the courthouse” era that preceded the Private Securities Litigation Reform Act, having a stable of cooperative repeat plaintiffs was vital to the success of many plaintiff’s firms.)
One way to check this thesis, Sirota suggests, would be to check the names on the Madoff victims list against those on the list of plaintiffs maintained by the Stanford Law School securities class action clearinghouse to see whether there are any other noteworthy matches and if so whether they follow any particular pattern.
It would be richly ironic if lead plaintiffs were “paid” with Madoff investments. Or perhaps this was just a way for Madoff to "conflict" out lawyers that might one day want to sue him. In any event this looks like a story worth following.
Charles Ponzi "loaned" money to gatekeepers so that they could invest his scheme.
Neat way of bribing the regulators and others.
Posted by: michael webster | February 16, 2009 at 10:58 AM